The 2018 spring buying season is expected to be one of the most competitive seasons in years, driven by spill-over buyers from last year and record-breaking inventory lows. Despite their willingness to resort to brash tactics to get a leg up, buyers remain optimistic about closing on their dream home, according to new survey data released today by realtor.com®.
“We’re only a few weeks into March and already seeing the market heat up,” said Danielle Hale, chief economist for realtor.com®. “Holdover buyers hoping for greener pastures this spring are likely to find sparse options that require them to pay top-dollar or make other concessions.”
Buyer demand is booming, which is reflected in today’s falling inventory and fast time on market. Despite record-low levels, inventory has been declining for 42 consecutive months and is currently down 8.5% from a year ago, according to realtor.com® listing data. Days on market in February was at 83 days, a record for that month.
A large portion of this demand is being driven by buyers who are holdovers from last summer and beyond, according to an online survey of more than 1,000 active buyers conducted in early March by Toluna Research.
The survey showed 40% of today’s buyers have been searching for more than seven months, while an additional 34% have been searching for four to six months. Slightly more than a quarter – 26% – have been in the market three months or less.
More than one-third — 35% — of those surveyed indicated they anticipate “a lot of competition” this spring, while 36% expect some competition, which could explain why many seem to be approaching the housing market strategically.
When asked about all the strategies they are using to get ahead, 42% revealed they are checking listing websites every day, while 40% of buyers plan to put more than 20% cash down. The survey also revealed that 33% are setting price alerts, 31% plan to put a larger earnest money deposit down, and 26% are willing to offer above asking price. Only 6% indicated they are not planning to use any tactics to cope with competition.
“The majority of buyers are aware of the tough competition they’re up against this spring. Having been in the market awhile, they’ve likely lost a few homes to better offers, which has given them more time to save and up their bidding strategies,” added Hale.
Despite the competition, buyers remain confident about closing on a home and are willing to stay the course. 19% of buyers expect to close in zero to three months, 34% of buyers expect to close in four to six months, 18% anticipate closing in seven to nine months, 15% in 10 to 12 months, and 15% expect it to take more than a year.